Monthly Archives: January 2012

India’s largest solar program cut the preferential rate it pays utilities for sun power as much as 33 percent as global prices of panels declined by more than half.
Photovoltaic plants commissioned after the Jan. 28 deadline will be paid a rate of 9.98 rupees (20 cents) per kilowatt-hour for the first 12 years, compared with 15 rupees for those finished on time, the Gujarat Electricity Regulatory Commission said in a tariff order on its website. The rate will be reduced to 7 rupees per kilowatt-hour for the next 13 years.
India joins governments in Europe that are cutting clean- energy subsidies as equipment costs plunge. Panel prices fell 51 percent last year after the 10 largest manufacturers doubled production capacity, according to data compiled by Bloomberg.
“The projects that missed the deadline will still be able to make money but not as much as they would have,” said Anmol Jaggi, director of Gensol Consultants Pvt., which advises project developers. Banks will be more cautious about lending to those facing the reduced tariff, he said.
Essar Energy Plc (ESSR) and MEMC Electronic Materials Inc. (WFR)’s SunEdison unit didn’t respond to e-mails and phone calls asking whether their projects were completed on time. Companies that finished their projects by Jan. 28 include Lanco Infratech Ltd. (LANCI), Tata Power Co. (TPWR), GMR Infrastructure Ltd. (GMRI), Azure Power India Pvt. and Green Infra Ltd.
The Gujarat Renewable Energy Development Agency didn’t respond to e-mails and phone calls requesting details on how many projects missed the deadline. Less than half of the 958 megawatts of capacity finished on time, Gensol’s Jaggi estimated.
Solar-Thermal Revision
Of the 958 megawatts of capacity, Gujarat issued contracts for 25 megawatts of projects using solar-thermal technology where steam is produced from sunlight for conventional turbines. Photovoltaic technology uses panels that convert sunlight directly into electricity.
The regulator raised the rate for solar-thermal projects and fixed it for 25 years to give them more certainty after one developer was unable to raise bank loans after 11 months, according to the tariff order. These projects will now be paid 11.55 rupees per kilowatt-hour that won’t be reduced from 11 rupees to 4 rupees per kilowatt-hour after 12 years as planned earlier, it said.
The rate paid to photovoltaic plants will be lowered 7 percent annually from the 9.28 rupees for each year that their completion is delayed after March 31, 2013, it said.
Source:- Bloomberg

Against the backdrop of fuel shortage, country’s largest power producer NTPC has said that adequate availability of coal could have helped the company to produce 10-15 per cent more electricity every year.

State-run NTPC has an installed capacity of 36,014 MW. Responding to a query on how much capacity have been affected by coal shortage, NTPC CMD Arup Roy Choudhury said it would be difficult to quantify.

“Definitely, it (coal shortage) is hurting our generation … may be we could have produced 10-15 per cent more every year, if we had got the required amount of coal,” he told PTI in an interview.

For the current fiscal (2011-12), NTPC’s coal requirement is about 164 million tonnes (MT). Out of the total, about 114 MT is estimated to come from Coal India.

In October last year, there was a significant dip in domestic coal supplies for NTPC plants that were estimated to have impacted about 4,000 MW power generation capacity.

The disruption was mainly on account of strike by Coal India workers, Telangana agitation and heavy rains.

At that time, the affected NTPC power stations include Dadri in National Capital Region, Singrauli & Unchahar in North, Vindhyachal in Madhya Pradesh, Farakka & Kahalgaon in East and Ramagundam & Simhadari in South.

Also, Coal India’s lower production is also impacting power projects in the country.

Coal India, one of the world’s largest coal producers, has revised its production target to 440 MT for the current fiscal from 452 MT.

NTPC also said that Coal India’s new pricing mechanism based on Gross Calorific Value (GCV) could lead to generation costs jumping by about 40 per cent.

“… we have not agreed on the recent proposals on calorific value price. We do not have any issues, if they are able to do so as per international norms, the way they are trying to do now will increase the prices by (up to) 40 per cent so that’s not fair,” Choudhury said.

NTPC imports about 16 MT of coal every year to meet its demand.

In December, the company commissioned the second unit of 660 MW Sipat Super Thermal Power Project in Chhattisgarh, taking its total capacity to 36,014 MW.

NTPC aims to have an installed capacity of 1,28,000 MW by 2032. It currently has 15 coal-based, 7 gas-based and 6 joint venture power stations.
Source:-Economics Times

Suzlon Group, the world’s fifth leading* and India’s largest wind turbine manufacturer has signed a contract for a 100 MW wind power project with CLP, India. The project comprises 48 units of Suzlon’s latest S97-2.1 MW wind turbines, featuring DFIG technology. The project will be set up in the state of Rajasthan and is scheduled to be commissioned by January 2013. Suzlon will execute the contract under its end-to-end business model. The deal is valued at over Rs. 600 crore (approx. US $122mn).

CLP India is a leading Independent Power Producer (IPP) and has built a portfolio that covers renewable energy, supercritical coal-fired and gas-fired generation, amounting to over 2715 MW. This new wind energy project, upon completion, will take CLP India’s wind power portfolio to more than 740 MW, reinforcing its leadership position amongst the biggest wind energy IPPs in India.

Shares of Suzlon Energy Ltd was trading in BSE at Rs.27, up by Rs.0.65 or 2.47%. The stock hit an intraday high of Rs.27.40 and low of Rs.26.70.

The total traded quantity was 15.21 lakhs compared to 2 week average of 78.82 lakhs.
Source:-Equity Bulls

Beta Wind Farm Pvt., a renewable energy unit of India’s Orient Green Power Co. (OGPL), borrowed the equivalent of $249 million in rupee and dollar loans from banks.
Beta Wind Farm, based in the southern city of Chennai, raised 5.5 billion rupees ($111 million) with an 11-year facility, and $30 million from a seven-year loan to fund a 156- megawatt renewable-energy project in the state, J. Sivakumar, Orient Green’s chief financial officer, said in a telephone interview today.
The company also got a 5.36 billion-rupee 10-year loan to finance projects in the states of Andhra Pradesh and Gujarat with a total capacity of 144 megawatts, Sivakumar said.
Axis Bank Ltd. (AXSB), India’s third-biggest private-sector lender, arranged the transaction, he said.
Source:-Bloomberg

India is hopeful of getting more than $100 billion worth of foreign investment in the nuclear power sector in the next two decades and a quarter of it would come from France, Commerce and Industry Minister Anand Sharma has said.

“In the coming two decades, India will see investments in excess of $100 billion in the nuclear power sector alone and I am sure that at least a quarter of these will come from France,” Sharma said, addressing the fourth India-France CEOs Forum here Monday.

The forum, comprising heads of leading businesses in France and India, was initiated by president Nicolas Sarkozy and prime minister Manmohan Singh in 2008 following Sarkozy’s state visit to India, signifying the growing bilateral commercial ties.

Sharma said France would play an important role in developing nuclear power facilities in India.

“In the energy sector, we greatly value our partnership with France, especially in the nuclear power sector where France is a global leader.”

Sharma said though over $14 billion worth of French investments in India were in the pipeline, it was not up to the potential. He urged French firms to enhance their business engagements with India.

“Given the strong position of French companies, the level of French investment in India is way below the potential. There are 800 French companies in India which engage over 80,000 people and we would like to see this growing in the coming years.”

Sharma, who also holds the textiles portfolio, invited French fashion design institutes to bring their best practices to India in partnership with indigenous lifestyles industry.

Referring to recent decision to allow 100 percent FDI in single brand retail, the minister hoped that French luxury goods companies will establish manufacturing bases in India.

“This will create a win-win situation as India has emerged as a huge market for luxury goods and establishment of manufacturing in India will provide maximum value,” he said.
Source:- Economics Times

Suzlon Group, leading wind turbines player, has announced fresh orders of 80 megawatts (Mw) in India, and a total of 189 Mw of orders in Brazil and US, over a period of one month, excluding orders announced separately. The cumulative orders are valued at approximately Rs 2,000 crore.

These cover various firm orders secured between December 22, 2011 and January 23, 2012 and represent a customer–mix, covering international special purpose companies (SPCs), PSUs, large corporates and small and medium enterprises (SMEs).
The order sizes range from as small as 0.6 Mw to 121 Mw and comprises of turbines from Suzlon’s latest S9X suite, among other S-series models.
Commenting about the orders, Tulsi Tanti, founder chairman and managing director, Suzlon Group mentioned, “It also confirms our ability to tailor end-to-end wind solutions to customers from all segments. India has a growing demand for energy and newer technologies are making it possible to harness low wind sites with profitable returns.”

“Brazil is an important market for us as we continue to focus on emerging economies. Orders in the US confirm our strong technology and product offerings in a competitive market,” he said.
Source:-Business Standard

Members of the Karnataka Pradesh Congress Committee minority department protested in front of the Hubli Electricity Supply Company Limited (Hescom) office in the Settlement area here on Monday, demanding withdrawal of the proposal to hike electricity tariff.KPCC minority department secretary Malikjaan Dukandar said that Hescom and other electricity companies have put a proposal to the Karnataka Power Corporation Limited (KPCL) to hike electricity price by 75 paisa per unit.

Electricity companies in Karnataka have been increasing the price, which is burdening the public, small scale industries and others. The government has failed to arrest the tariff hike and at the same time has been unable to provide proper power connection to houses built under the ‘Ashraya Yojana’, he said.The protesting members submitted a memorandum to Hescom administrator.
Source: Times of India

Taking note of a formal end to the controversial ‘no-go’ classification of coal mining projects, the coal ministry has asked states to give revised proposals to the environment ministry for projects stuck in no-go areas. This would help redeem investment amounting to Rs 40,000 crore in key infrastructure projects in power, cement and steel sectors.

These projects had come to a standstill after the environment ministry, under then minister Jairam Ramesh, had announced the classification over a year ago. This had barred mining activities in major coal-bearing areas and blocked the development of 203 coal blocks, with reserves of a whopping 660 million tonnes (mt) — enough to fire a power generation capacity of 130,000 MW. Blocks allotted to two dozen companies, including NTPC, Coal India, Hindalco, Essar Power and Adani, fell under the no-go zones.

In September, a 12-member group of ministers (GoM), headed by finance minister Pranab Mukherjee had recommended doing away with the no-go policy, initially mooted to protect dense forest areas from the ill-effects of mining. The recommendation was based on a detailed report by Planning Commission member B K Chaturvedi.

THE ‘NO-GO’ GHOST IN NUMBERS

Total coal bearingarea in India (sq km)

17,300

Total geologicalcoal reserve (BT)

277

Coal bearing area out
of total forest area (%)

0.16

Power need metby coal (%)

70

Total no of coalblocks in India

602

No of blocksidentified in No-Go

203

Spread over in area(sq km)

3,039

Annual production
potential (MT)

660

Equivalent powergeneration capacity (Mw)

1,30,000

Source: Coal ministry

“In view of the GoM’s recommendation, it is requested proposals for forest and environment clearances which were rejected on the above account and proposals pending at various levels may be further processed and sent to the ministry of environment and forests for clearance without delay,” the coal ministry had said in a letter to state governments on January 27.

In the fifth meeting of the GoM on 20 September, in which Chaturvedi’s report was reviewed, environment minister Jayanthi Natarajan had agreed no-go should not be the basis for clearance or rejection of coal blocks. She had said the classification was an initiative of the coal ministry.

The controversy over no-go areas began two years ago after the coal and power ministries had approached the environment ministry to discuss ways to minimise delays in grant of environment clearances. To have an accurate assessment of the country’s coal reserves, a map of coal-bearing areas was superimposed then over the country’s forest cover.

The Chaturvedi committee had vehemently opposed the no-go policy, arguing the regeneration of forests after mining activities could be much more in the long run, compared to what might have been be temporarily lost. Chaturvedi had also cited the advice of the law ministry and the Attorney General and refutes the basis of the no-go policy. Apart from backtracking on the no-go policy, the environment ministry had also agreed to permit 25 per cent expansion in already-expanded coal projects without a public hearing, a recommendation of the Chaturvedi committee.

In a communication to Dr Singh, Mr Anil Ambani, Group Chairman, ADAG, said the 2,400-MW plant was ready and awaiting allocation of 9.6 mmscmd gas as recommended by the Power Ministry.

Mr Ambani said, “We also understand an Empowered Group of Ministers (EGOM) meeting is to be convened to consider the proposals for gas allocation of various projects.”

He pointed out that the last meeting of EGOM was held in July 2010 and projects such as Samalkot were awaiting gas allocation for commissioning.

PRO-RATA ALLOCATION

Mr Ambani said that the Supreme Court ruling in 2010 in the Reliance Industries verses RNRL case said that “we should be considered for gas allocation in line with government policy. Now, we are ready for commissioning the plant and are requesting for gas for the power sector, which has been acknowledged as a priority sector. We fulfill all requirements for gas allocation as outlined by the Gas Utilisation Policy.”

Seeking distribution of available domestic gas to all existing and upcoming gas-based power projects on a pro-rata basis, Mr Ambani said he understood that there were short-term shortages on the supply front. ADAG had requested, in line with the Saumitra Chaudhari Committee report on pooling of gas prices, that the allocation to non- priority sectors be reallocated to the priority sectors of power and fertiliser.

ADAG had also requested that available gas for the power sector be equitably provided to all projects on an equal PLF (plant load factor) basis so that each of the units can achieve minimum viability until supplies ramp-up.

Mr Ambani went on to add that a memorandum of understanding had been signed for the project, during US President, Mr Barack Obama’s visit to India and the US Exim Bank had extended $600 million loan for equipment purchase.

In the second quarter, Mr J P Chalasani, Chief Executive Officer, Reliance Power, said he did not foresee any issue for gas during commissioning and only the long-term supply had to be addressed, which the plant would need by June, 2012.

He felt the plant would get 65 per cent of its requirement like others and could be operated during peak load time, till it began combined cycle operations, which would be by December, 2012. A combination of domestic and imported gas could be considered thereafter or the plant could operate at lower PLF of 65-75 per cent.

India’s new coal price mechanism will be reviewed after March and current prices calculated under the system will hold until then, Coal Minister Sriprakash Jaiswal said on Tuesday.

He also said the assessment of the new mechanism will be done after assessing Jan-Mar quarter revenues of state-run miner Coal India, which produces about 80 percent of India’s coal.

Jaiswal said any revised mechanism after March would be revenue-neutral for Coal India, which aims to produce 464 million tonnes of coal in 2012/13.

Earlier this month, the state-run miner decided to benchmark the pricing for non-coking coal to gross calorific value (GCV) from the current useful heat value (UHV) based gradation, a move that is expected to push up costs for cement and steel makers.

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